Category Archives: Commentary

Civil Damage Actions for Corruption: Possibilities Offered by the Mozambican Hidden Debt Scandal

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The April 2016 disclosure that Mozambican officials accepted large bribes to secretly guarantee hundreds of millions of dollars in loans wreaked enormous damage on the nation’s economy and its citizens. The “hidden debt” scandal caused economic growth to plummet and donors to freeze funding, forcing the government to make deep cuts in public spending (media accounts here, here, here, and here; selected GAB posts here, here, and here).

The Mozambique government has brought a criminal action against a number of the alleged perpetrators in its own court (Mozambique indictment) and filed a civil suit for damages against others in the London High Court (Mozambique complaint).  So far, though, no citizen has filed an action for the harm hidden debt scandal caused them.

In a recent paper, “Civil Suits for Damages by Mozambicans Harmed by the Hidden Debt Scandal,” I consider who in Mozambique might be able to bring a damage action, for what and where, and the additional legal and factual research required before one or more more suits are filed. Comments welcome.

The Bridgegate Case May Weaken a Powerful Legal Tool for Fighting Corruption in the United States

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This past January, the U.S. Supreme Court heard oral arguments in a case that has the potential to make it significantly harder for federal prosecutors to enforce public integrity laws. That case, Kelly v. United States, centers on whether two associates of former New Jersey governor Chris Christie, Bridgette Kelly and Bill Baroni, committed criminal fraud within the meaning of a federal statute codified at 18 U.S.C. § 666 (sometimes referred to simply as §666). Section 666 prohibits government agents from “knowingly or intentionally misapply[ing] property that is valued at $5,000 or more” and owned by an agency that receives over $10,000 in federal funding during any one-year period. Federal prosecutors argued that Kelly and Baroni violated §666 when they lied in connection with using public funds and property to carry out political retaliation against a New Jersey mayor who had refused to endorse Governor Christie. The alleged retaliation involved creating traffic jams by closing lanes on a major bridge (hence the moniker “Bridgegate”) using the trumped-up excuse that the lane closure was for a “traffic study.”

Kelly and Baroni were convicted at trial, but they are arguing on appeal that the prosecutors’ interpretation of §666 embraces an “astoundingly expansive theory of criminal fraud,” under which any public official could be indicted “on nothing more than the (ubiquitous) allegation that she lied in claiming to act in the public interest.” If Kelly and Baroni convince the Supreme Court to interpret §666 more narrowly, this could be the most significant change in U.S. public corruption law since the Court’s decision in McDonnell v. United States.

Continue reading →

Improving India’s Right to Information Law to Protect Citizens

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As I discussed in my last post, India’s Right to Information (RTI) law has proven to be a remarkably effective anti-corruption tool, for two main reasons. First, the law makes it easy for ordinary citizens to submit information requests. Second, the law creates a system of review by independent Information Commissions, at both the central and state levels, to ensure compliance. Citizens can appeal a government agency’s failure to provide information, or an insufficient or incomplete response to an information request, to the appropriate Information Commission, which are endowed with both autonomy and strong enforcement powers. But last July, the Indian parliament amended the RTI law—over the objections of both the opposition and civil society organizations—in ways that undermine the effectiveness of the law by giving the central government more control over the functioning of the Information Commissions.

My last post focused on criticizing these amendments, and I will not restate those criticisms here. Instead, I will take up another question: How should the government improve the RTI law? For while the law has indeed had a positive impact—as an anti-corruption tool among other things—its effectiveness is hampered by a number of important problems. Among the most serious is the risk of retaliation against RTI users. Such retaliation can take the form of harassment, threats, physical assault, and in some cases even murder. To take just one egregious example, this past December the activist Abhimanyu Panda was murdered in the state of Odisha, allegedly in connection with his vigorous use of the RTI law to expose corruption. (According to news reports and a fact-finding report by a civil society network, days before Abhimanyu’s murder he had filed multiple RTI applications asking for information concerning a subsidized food program intended for the poor. His requests sought information about the recipients and the grain stocks at particular locations; if there is corruption in the program, these are the sorts of documents that would be altered or made to disappear.) Sadly, Abhimanyu is far from the only victim. There have been over 442 documented attacks and over 80 murders of citizens directly related to the information they have sought under the RTI law. These cases end up being treated as criminal matters and investigated by the police—as they should be—but the institutions associated with implementing the RTI law should have a more active role in addressing and preventing the retaliation problem.

In particular, there are two measures the government could take—possibly under the existing legal framework—that would improve transparency and diminish the incentive to use the threat of retaliation to keep incriminating or embarrassing information out of the public eye. Continue reading →

What to Study in a Corruption Studies Program: Comments & Information Please

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Despite Trump lawyer Rudy Giuliani’s attempt to paint Ukraine as a cesspool of corruption to advance his client’s reelection, media reports (here and here) and assessments by the IMF and the World Bank show the country making steady progress in bringing corruption to heal. One especially promising sign is the large number of university students and mid-career professionals studying how to combat corruption. Last September Ukraine’s Anticorruption Research and Education Center (ACREC) partnered with the National University of Kyiv-Mohyla Academy, the nation’s oldest institution of higher learning, to offer a degree in corruption studies for students and a certificate for civil servants, business executives, and others in the workforce needing to know more about the topic to better do their job. Classrooms are bulging, and plans are being made to expand the number of courses.

The Ukraine program sparked the interest of other Eurasian nations in starting similar programs, and in January representatives of non-governmental organizations and universities from Armenia, Georgia, Kyrgyzstan, and Moldova met in Kyiv to learn from ACREC’s experience. Topics included whether to concentrate on students or mid-career professionals, whether, as in Ukraine, a program should be offered by a partnership between an NGO and a university, and the pros and cons of charging tuition versus seeking a grant from the government or a donor agency.

I spoke about what to teach. As the notes from my talk show, my bias is towards a heavily academic curricula, one that stresses analytical tools that prepare students to tackle a range of public policy issues. That is not the only way to teach about corruption, and indeed my friend Alan Doig has argued for a different focus.

I had planned to compare my proposed corruption studies curricula with those offered by universities and other institutions across the globe, but surprisingly little is readily available on the web.  A 2013 U4 Anticorruption Resource Centre study catalogued the courses and degree programs then offered but contains little on what is taught and many of the links to the programs are dead.  The only substantial description of a curricula I found was that of the International Anticorruption Academy, which has offered a Masters-level program in corruption studies since 2012 along with individual courses on specialized topics. (Full disclosure: one of which on local government I have taught on occasion.)

If we want more effective anticorruption policies and better implementation of those policies, we need policymakers, policy advisors, administrators, lawyers and business executives with a deep understanding of corruption and how to combat it. There is no one curricula or course that will meet everyone’s needs.  The more the global anticorruption community knows about what has been taught and what has been learned about teaching corruption, the better.  Readers with thoughts on what students and anticorruption practitioners should learn, with course syllabi, information on degree or certificate programs, and experience in or techniques for teaching about corruption are invited to share their knowledge with the GAB community.

The 2019 Amendments to India’s Right to Information Law Threaten to Blunt a Powerful Anticorruption Instrument

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India’s Right to Information (RTI) law, originally passed in 2005, gives all citizens the right to submit a request for information (in person, in writing, or online) to any public authority at the national, state, or local level; the request may concern any information related to the functioning and affairs of that authority. If the request is denied or unduly delayed, or if the information provided is incomplete, applicants may appeal, first to a designated Public Information Officer at the public authority to which the request was made, and then to special bodies called Information Commissions, established at both the state and national levels. These Information Commissions are designed to be autonomous and have the power not only to order timely production of requested information, but to levy penalties on public authorities for noncompliance and to award compensation to citizens whose requests were wrongfully denied or ignored.

India’s RTI law—which is one of the strongest such laws in the world, used by an estimated 4-6 million people annually—has proven to be a particularly effective anti-corruption tool. There are hundreds of examples of ordinary citizens using the RTI law to expose local government corruption, and the law has also unearthed some major national-level corruption scams. For instance, an RTI request filed by a civil society activist group revealed that a housing society on prime land in South Bombay, meant for war widows, was wrongfully given out to politicians, bureaucrats, and military officers; this so-called “Adarsh Society Scam” led to the eventual resignation of the Chief Minister, as well as criminal charges against several officials. Another civil society group used the RTI law to expose the “Commonwealth Games Scam,” in which funds associated with the Commonwealth Games in Delhi, earmarked for the social welfare of marginalized communities, had been wrongfully diverted. The exposure of this malfeasance led to an official investigation that ultimately resulted in the arrest and suspension of the responsible minister.

This past July, the Indian parliament amended the RTI law for the first time, despite resounding opposition. While there are indeed aspects of the RTI law’s implementation that need to be addressed—including the numerous vacancies at Information Commissioner posts, which has led to long delays and backlogs in RTI appeals—the amendments do not address any of these genuine pressing issues. Instead, the amendments focused on the appointment, tenure, and salary of the Information Commissioners. Proponents of the changes claimed that these amendments were minor technical fixes, designed to streamline the appeals process and improve functioning. In fact, the amendments pose a serious threat to the autonomy of the Information Commissions, and thus to the efficacy of the RTI law in exposing wrongdoing that could embarrass or incriminate powerful political figures and their cronies. Continue reading →

Small Year-to-Year Changes in CPI Scores Are Meaningless. Small Year-to-Year Changes in CPI Scores Are Meaningless. Small Year-to-Year Changes in CPI Scores Are Meaningless

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Last month, Transparency International (TI) released the latest version of its Corruption Perceptions Index (CPI)–an index that I continue to believe is useful and important, and that I regularly defend against the blunderbuss critiques sometimes leveled by a few of my colleagues in the academy. Yet every year when the CPI comes out, we see a spate of articles and press releases that focus on individual countries’ score changes from one year to the next. (For some examples from this year, see here, here, here, here, and here.) TI contributes to this: Despite the qualifications and cautions one can find if you search TI’s web site diligently enough, TI’s lead press release and main CPI report inevitably play up these changes, connecting them to whatever larger narrative that TI hopes to convey. This year was no exception. This time around, the press release emphasizes that “(f)our G7 countries score[d] lower than last year: Canada (-4), France (-3), the UK (-3) and the US (-2). Germany and Japan have seen no improvement, while Italy gained one point”–and TI treats this as evidence for the assertion, in the title of the press release, that the “2019 Corruption Perceptions Index shows anti-corruption efforts stagnating in G7 countries.”

Sigh. I feel like I have to do this every year, but I’ll keep doing it until the message sinks in. Repeat after me:

  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Even big changes in an individual country’s CPI score may well be meaningless, given the fact that, in a collection of 180 countries, random noise will sometimes produce unusually large changes an a handful of countries (for the same reason that if you flip a set of five coins 180 times, odds are a few of those times you’ll get five heads or five tails).
  • Because year-to-year changes in an individual country’s CPI score usually meaningless, they are not newsworthy, nor can they be invoked to make substantive claims about corruption’s causes or consequences, or the success or failure of different countries’ anticorruption policies.

I don’t want to repeat everything I’ve written before explaining why this is so; I explained this at length in my post last year, after the 2018 CPI came out. (That post, in turn, relied on my prior writing on this topic: See here, here, here, here, here, and here.) I’ve kind of given up hope that TI will actually modify the way it talks about within-country year-to-year CPI score changes in its press releases. I know enough people at TI (great people, I should add) who are aware of what I (and plenty of others) have had to say on this topic that I can only assume that the failure to change is a deliberate decision on the part of TI’s leadership and communications team. I strongly suspect that the serious researchers at TI who work on the CPI are slightly embarrassed by how the index is framed by the organization for public and media consumption, but there’s nothing they can do about it. Despite the apparent futility of my prior efforts, I’ll keep harping on this, in the vain hope that the message will gradually trickle out.

The Shortcomings of the Leniency Agreement Provisions of Brazil’s Clean Company Act

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If the CEO of a corporation operating in Brazil learns that her company has committed an unlawful act of corruption, should she order the corporation to self-report and negotiate a leniency agreement with the Brazilian authorities under Brazil’s 2013 Clean Company Act, which authorizes such settlements? In most of the cases, the corporate legal department would probably advise against it. Indeed, the number of leniency agreements based specifically on Brazil’s Clean Company Act has been much smaller than expected.

Several factors drive companies away from cooperating with Brazilian public authorities under the Clean Company Act:

Continue reading →

How Much Should We Worry That Trump’s Top Economist Is “Looking Into” Weakening the FCPA?

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As regular GAB readers have likely figured out, I’m not terribly good at providing timely “hot take” reactions to news items—I’m too slow and get too distracted with other things, and by the time I weigh in on some recent development that caught my eye, I’m usually a couple of news cycles behind. So it will be with this post. But I did want to say a bit about the mini-controversy over comments a couple weeks back from Larry Kudlow, the Director of the White House National Economic Council, about the Trump Administration’s views on the Foreign Corrupt Practices Act (FCPA). For those who might have missed the reports, here’s the basic gist:

A forthcoming book about the Trump Administration includes the story (which had already been reported multiple times) that back in 2017, President Trump had vigorously complained to then-Secretary of State Rex Tillerson that the FCPA put U.S. companies at an unfair disadvantage and ought to be scrapped or drastically altered. (Tillerson, to his credit, pushed back, and no action was ultimately taken.) Several pre-release commentaries on the book focused on this anecdote (see here and here), and a couple weeks back a reporter asked Kudlow about it. Kudlow responded, “We are looking at [the FCPA], and we have heard some complaints from our companies…. I don’t want to say anything definitive policy-wise, but we are looking at it.” When pressed for details, Kudlow said, “I don’t want to say anything definitive policy-wise…. Let me wait until we get a better package [of reforms].”

Kudlow’s comments triggered a great deal of critical reaction, including statements supporting the FCPA from civil society organizations like Transparency International and the Coalition for Integrity. These statements were forceful but measured, mainly emphasizing the benefits of the FCPA. Some other media reactions were more impassioned, playing up the narrative that the Trump Administration was planning to push for the legalization of (foreign) bribery (see here and here). That latter strain in the commentary, in turn, provoked pushback from other analysts, who saw Kudlow’s remarks (and perhaps also the President’s own statements and actions in this area) as no big deal (see here and here).

My own take is somewhere in the middle. On the one hand, we shouldn’t exaggerate the significance of Kudlow’s remarks. But neither should we dismiss them as meaningless or harmless. Continue reading →

Dershowitz is Wrong: What Trump Did Was a Crime

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Desperate to acquit Donald Trump of impeachment charges, Senate Republicans have seized on Harvard Law Professor Alan Dershowitz’ two part defense. That conviction requires Trump to have committed a crime and that it was no crime for Trump to condition aid to Ukraine and a meeting with its president on Ukraine investigating Trump political rival Joseph Biden.  There is but one flaw in Dershowitz’ argument.  It is flat wrong.  Section 201 of title 18 of the United States Code makes it a crime for a public official to solicit a bribe.  And that is exactly what Trump did. Continue reading →

Picking the Wrong Targets: Tirana Mayor Erion Veliaj’s Crackdown on Street Vendors Punishes the Victims of Corruption, Not the Perpetrators

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These days if you Google “Tirana,” Albania’s vibrant capital city, you will find a plethora of articles highlighting the city’s rapid transformation and reinvigoration, with much of this positive change attributed to the vision of its young, Western-educated mayor Erion Veliaj. Mr. Veliaj, who took office in 2015 after a career in the NGO world, was a political outsider and rose to power on a wave of hope that he would introduce a new brand of governance—one that included cleaning up entrenched, systemic corruption. Mr. Veliaj frequently emphasized this theme, together with the need for greater accountability more generally. He represents a cohort of young politicians in the region who promise radical change to voters craving leaders truly dedicated to fighting for everyday people instead of special groups and political machines.

Yet despite his professed commitment to clean government, Mr. Veliaj hasn’t been terribly vocal about high-level corruption (including the scandals within his own Socialist party), nor has he done much to address concerns about a lack of transparency in public procurement. Instead, he has focused on going after some of his municipality’s most vulnerable populations, like street vendors (see here). Yes, it’s true that these vendors typically do not have the requisite licenses, and some pay bribes in order to be able to operate. However, these street vendors, who work in the informal economy out of necessity, are hardly the engine of corruption in Tirana and wider Albanian society. Rather than treating the street vendors as criminals, Mr. Veliaj would do better to adopt an alternative strategy that would both protect this vulnerable population by integrating them into the formal economy, and tamp down the associated corruption problems. Continue reading →